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Friday, November 15, 2013

China and 2013 Semiconductor Sales

Based on IC Insight's recent report of 2013 Semiconductor
(see below), growth of cell phone sales in China brought Mediatek to the second
place in growth ranking of the top 20 semiconductor suppliers. The list
includes foundries (TSMC, GlobalFoundries, and UMC) and five fabless companies.
IC foundries are included in the top-20 semiconductor supplier.

"Mediatek is
expected to rank 16, up from 22 in last year's list, with smartphone
application processor shipments nearly doubling to 200 million up from 108
million last year. The company "is experiencing extremely strong demand
for its devices in the booming low-end smartphone business in China and other
Asia-Pacific locations."

SK Hynix, MediaTek, Micron, and Qualcomm each forecast to
show ≥30% year-over-year growth.

Later this month, IC Insights’ November Update to the 2013
McClean Report will show a preliminary ranking of the top 25 semiconductor
suppliers in 2013.A preview of the top
20 companies is listed in Figure 1.The
top 20 worldwide semiconductor (IC and O-S-D—optoelectronic, discrete, and
sensor) sales leaders forecast for 2013 include nine suppliers headquartered in
the U.S., three in Japan, three in Europe, three in Taiwan, and two in South
Korea.

The top-20 ranking includes three pure-play foundries (TSMC,
GlobalFoundries, and UMC) and five fabless companies. IC foundries are included
in the top-20 semiconductor supplier ranking because IC Insights has always
viewed the ranking as a top supplier list, not as a marketshare ranking, and
realizes that in some cases semiconductor sales are double counted.With many of our clients being vendors to the
semiconductor industry (supplying equipment, chemicals, gases, etc.), excluding
large IC manufacturers like the foundries would leave significant “holes” in
the list of top semiconductor suppliers.Overall, the list shown in Figure 1 provides a guideline to identify
which companies are the leading semiconductor suppliers, whether they are IDMs,
fabless companies, or foundries. Excluding the foundries of TSMC,
GlobalFoundries, and UMC, from the top-20 ranking would bring Fujitsu ($3,524
million), Marvell ($3,205 million), and Sharp ($3,078 million) into the 18th,
19th, and 20th positions, respectively.

There are numerous changes expected within the top-20 semiconductor
ranking in 2013 as compared to the top 20 ranking of 2012.Some of the companies forecast to rise in the
ranking include SK Hynix, which, despite a significant fire and production
set-back at its largest memory fab in China, is taking full advantage of the
surge in the DRAM market this year and is expected to move up three places and
into the top 5.Also, Broadcom is
forecast to edge into the top 10, Micron is expected to move up two spots,
spurred by its acquisition of Elpida in 3Q13, and MediaTek is forecast to jump
up six positions to 16th place and into the top-20 ranking for the first
time.MediaTek is experiencing extremely
strong demand for its devices in the booming low-end smartphone business in
China and other Asia-Pacific locations.In fact, MediaTek expects its application processor shipments for
smartphones to reach over 200 million units this year, about double the 108
million units the company shipped in 2012.

In contrast to the companies moving up in the ranking,
Fujitsu is expected to drop five places to fall out of the top-20 ranking in
2013, going from being ranked 16th in 2012 to 21st this year (the company sold
its analog and MCU business to Spansion in August of this year).Renesas is another “casualty” expected in the
top-20 ranking and is forecast to fall to 11th place in 2013 from the 7th
position it held in 2012.

Figure 1

In total, the top 20 semiconductor companies’ sales are
forecast to increase by 7% in 2013 as compared to 2012, which would be two
points better than the 5% forecast for the total worldwide semiconductor market
this year.It is expected to take total
semiconductor sales of over $3.7 billion to make the top-20 ranking in 2013.

As shown in Figure 2, there is expected to be a
60-percentage-point range of growth rates among the worldwide top 20
semiconductor suppliers in 2013 (from +44% for SK Hynix to -16% for Sony).The continued success of the fabless/foundry
business model and the strong growth of the memory market (especially the 29%
DRAM market surge) this year is evident when examining the nine top-20
semiconductor suppliers that are forecast to log higher growth than the total
worldwide semiconductor market (5%).As
shown, the top nine performers in 2013 are forecast to include three memory
companies (SK Hynix, Micron, and Toshiba), two fabless companies (MediaTek and
Qualcomm), and two pure-play foundries (TSMC and GlobalFoundries).

Figure 2

Figure 2 illustrates that the two top-20 ranked
companies that are forecast to register double-digit sales declines in 2013 are
headquartered in Japan (Renesas and Sony).As previously mentioned, Japan-based Fujitsu is also expected to register
a double-digit decline (-15%) in 2013 and drop out of the top 20 ranking this
year.However, it should be noted that
the conversion of Japanese company semiconductor sales from yen to U.S.
dollars, at 96.96 yen per dollar forecast for 2013 versus the 79.70 yen per
dollar rate in 2012, is expected to have a significant impact on the sales
figures for the Japanese companies.Using a constant 2012 U.S. dollar versus Japanese yen exchange rate for
2013, the forecasted 2013 semiconductor sales increases of Sony, Fujitsu, and
Renesas would be 4%, 3%, and 2%, respectively.